classical economics
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and policy design

Defeat Elitist Wolfpack
By Wayne Jett © October 16, 2009
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    The current economic debacle has been brought about intentionally by design of powerful elites who dominate financial markets, public policy and "mainstream" media. Their plan is to destroy the middle class as an effective competitor against their rule of markets and governments. The upper middle class - the most productive and prosperous of all those who accept the ethic that work is the moral means of advancing the interests of one's self and one's family - are the most hated adversary of the dominant elite, because the upper middle class is the only effective competitor to arise against the dominant elite in the past millennium.
Elitism in America
    During the early 20th Century, H. G. Wells was a most influential theoretician of the dominant elite in America and elsewhere. He deplored democracy and capitalism, he said, because they enabled the middle class to impose a "dictatorship" upon the enlightened elite. In fact, democracy and capitalism are the tools essential for the middle class to compete with the elite in political and market arenas. In Wells' 1901 blockbuster non-fiction book Anticipations, he advised that nations wishing to be "ascendant" in the world ought to educate their most able and "poison their people of the abyss." American political leaders found most praise-worthy were Theodore Roosevelt and Franklin Roosevelt, each an aristocrat from New York, one a "progressive" Republican and the other a Democrat. Each Roosevelt invited Wells to the White House for extended audiences.
    In 1934, the same year Wells visited with Franklin, Eleanor and the Brain Trust team, FDR wrote a personal letter to E. M. House, the man who was Wall Street's chief lobbyist who recruited Woodrow Wilson into politics and influenced creation of the Federal Reserve System and the federal income tax during Wilson's administration. FDR conceded to House "the truth, as you and I know," that every government since Andrew Jackson has been owned by a certain part of the financial sector (namely, Wall Street), including the Wilson administration. Roosevelt did not say that his own administration was included, but undoubtedly both he and House knew that to be the case.
    FDR took the dominant elite from the Republican Party to a new political home in the Democratic Party. Republican Calvin Coolidge had enabled the middle class to thrive during the 1920s by cutting income tax rates and refusing to sign higher tariff laws to provide monopoly markets. "Progressive" Republican Herbert Hoover reversed both policies in 1929 and did nothing to stop rampant fraud in financial markets. The Crash of 1929 and the Great Depression ensued. FDR was elected in a landslide to go back to low taxes and low tariffs, as Democrats were adamantly low tariff and free trade under Wilson. But FDR raised taxes throughout his four terms and torpedoed efforts of his own secretary of state to lower tariffs.
    Indeed, FDR orchestrated the Great Depression with behind-the-scenes moves designed by the dominant elite to destroy the middle class and to acquire assets worldwide at depression prices.
The Current Elitist Assault
    Since 2000, the dominant elite in the U. S. have engaged in a historically aggressive campaign of robbing and pillaging capital of the middle class through fraud in financial markets and manipulation of prices for crude oil and energy. With captured federal regulators and legislators aiding their crimes, the dominant elite robbed trillions during 2008 in the destruction of major financial firms and many other publicly traded firms. By and large, corporations, their management and shareholders were the victims, not the predators, in the events of 2008 and 2009. Despite all evidence showing massive crimes in financial markets relating to destruction of Bear Stearns, IndyMac, Fannie Mae, Freddie Mac, Lehman Bros., AIG, Merrill Lynch, Washington Mutual, Wachovia Bank, General Motors and many others, the Securities & Exchange Commission has acted precisely as when presented proof of Bernard Madoff's crimes - doing nothing other than aiding and abetting wrongdoers.
    Having greatly depleted the capital resources of the American middle class, now the dominant elite are moving in for the kill. Cap-and-trade legislation passed by the House would give the dominant elite a strangle-hold on middle class prosperity, as it would enable complete control of all sources and uses of energy. Economical energy is essential to advancement of economic interests of the poor and middle class. Likewise, the dominant elite are insisting upon pushing through health care laws that would give them (through government) control over life and death issues of the middle class. That is a tool of immense utility to those with totalitarian aims.
    Already environmental laws passed in 1972 during the term of another president dominated by the elite, Richard Nixon, are being used as pretext for cutting off fresh water for food production in the San Joaquin Valley, the most important source of food in the Western U. S. Such public policy is anti-social - indeed, it is sociopathic.  It must be turned aside and reversed.
    FDR's "bill of rights" pretended to aspire towards worthy goals for advancement of living standards, but concealed a hidden agenda. By stating each goal as a "right," FDR put the government (and thus the dominant elite) in control of all efforts to move towards the stated aim. This is a fatal and poisonous flaw. What must be preserved is individual liberty and opportunity to undertake and to achieve such ends.
    Make no mistake. The ends described in FDR's "bill of rights" are not the ends sought by the dominant elite. H. G. Wells reflected the views and motives of the dominant elite when he insisted that prosperity causes higher birth rates among undesirable classes of people, and that population growth was the "greatest evil" in the world. See “Paradigm ‘E’” discussion of this topic.
What Must be Done
    To overcome this relentless assault by the dominant elite, the middle class must identify and support political leaders who are able and willing to confront the elitist evil for what it is: a vast criminal enterprise which ought to be investigated, prosecuted and stripped of its ill-gotten assets and policy influence. Owing largely to elite domination of media, many middle class people are misled in political ideology. But all must look to the reality of where our interests lie and what we must do if we are to survive and prevail.
    Short-term political objectives should include:
(1) ban enforcement of any "naked" credit default swap, in which the owner of the CDS is a party other than the owner of the underlying debt/bond;
(2) order the SEC to reinstate the "up-tick" rule immediately;
(3) ban all high frequency trading of corporate securities and all tactics utilizing incoming buy and sell orders data to enable any party to front-run those orders;
(4) repeal "discretion" granted to the SEC to ignore any substantial violation of federal securities laws, create a special financial crimes strike force in the Justice Department with authority and responsibility to investigate and prosecute fraudulent violation of federal securities laws, and to recover all assets acquired by such fraud;
(5) mandate immediate buy-in by the buyer's broker at the expense of the seller's broker of all corporate shares presently undelivered within three days of the date of the original transaction, and mandate prosecution as a federal felony of every intentional failure-to-deliver any security sold in U. S. financial markets;
(6) mandate reporting of all trading in derivative securities in any way related to crude oil, and place strictly enforced position limits upon purchase of such derivatives by any party if the product covered by the derivative is not to be consumed directly by that party, and require CFTC investigation and prosecution of all evidence of manipulation of crude oil prices, with recovery of ilicit gains;
(7) impose upon the Federal Reserve a hard money rule, prohibiting manipulation of interest rates and requiring management of dollar liquidity to achieve a stated target price of gold in the markets;
(8) audit the Federal Reserve, curtail its authority to issue currency used in the U. S., and move to a system of issuing currency directly from the U. S. Treasury;
(9) defeat imposition of government-controlled health care on the American people;
(10) defeat legislation and repeal laws directed against prosperity of the poor and middle class, including the Endangered Species Act and cap-and-trade legislation. ~